The ratings on the stapled Diversified Utility and Energy Trusts (DUET) reflect the creditworthiness of its underlying investments and adequacy of cash flow coverage. These strengths are offset by the subordinated nature of the investments in winding up and receipt of cash flows, the potential for interruption of cash flows to the trusts due to lockup at the operating company level, and minimal liquidity at the DUET level. The issue rating assigned to the A$415 million preferred to ordinary with exchange and reset securities (POWERS) issued by POWERS Trust, a subtrust of DUET, reflects their status as DUET's senior secured debt instrument, the security held over DUET's equity and debt interests in asset-holding companies, and structural features, which means POWERS...
Companies mentioned in this report are:
- DUET Group
- United Energy Distribution Pty Ltd.
- Energy Partnership (Gas) Pty Ltd.
- United Energy Distribution Holdings Pty Ltd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Full Analysis